New Delhi: Gold prices scaled their highest in more than six years on Tuesday, as concerns around protests in Hong Kong and an Argentine currency crash amid fears of global economic slowdown, prompted investors to move away from riskier assets.
Spot gold rose 0.7% to $1,521.98 per ounce as of 0715 GMT, its highest since April 2013.
US gold futures rose 1% to $1,533 an ounce.
"It is a pretty straight forward case of risk aversion.
Crisis in Argentina and political deterioration in Hong Kong; underlying all of this, global growth is slowing," said Ilya Spivak, senior currency strategist with DailyFx.
"Central banks can only do so much because a lot of them are at near record low interest rates. There is not a lot of ammunition to deploy as counter measures to the slowdown in global growth." Protesters managed to shut down Hong Kong's airport, the world's busiest cargo airport, on Monday. The protests, which started as opposition to an extradition bill to mainland China, have expanded into wider calls for democracy.
On the other side of the globe, fears of a possible return to interventionist policies gripped the Argentine market after market-friendly President Mauricio Macri lost by a much bigger-than-expected margin in presidential primaries.
These uncertainties alongside fears of a drawn out Sino-US trade war rattled financial markets, spurring investors to safe-haven assets.
Bullion, along with the Japanese yen and US Treasuries, is seen as a relatively safe investment in times of political and financial uncertainty. The yen stood near a seven-month high against the dollar.
Investors are focused on the Federal Reserve's annual symposium next week. Traders see a 74% chance of a 25 basis-point rate cut by the Fed this September.
Lower interest rates decrease the opportunity cost of holding non-yielding bullion and weigh on the dollar, making gold cheaper for investors holding other currencies.
"Heightened geopolitical risks from Hong Kong protests along with global growth concerns remain largely supportive towards safe haven flows," brokerage Phillip Futures said in a note.
"Gold prices must hold above $1,500 for an extension of the bullish wave in the current term." Reflecting increased investor interest in gold, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, jumped 0.9% to 847.77 tonnes on Monday from Friday.
Spot gold may test a resistance at $1,524 per ounce, a break above which could lead to a gain to $1,546, said Reuters technical analyst Wang Tao.
Among other precious metals, silver climbed 1.8% to $17.36 per ounce. During the session, it hit its highest since January 2018 at $17.42.
Platinum rose 1.3% to $863.83 and palladium gained 0.7% to $1,437.98 an ounce.